Aussies withdrew $9bn in superannuation in three weeks

author-avatar By on May 18, 2020
Aussies withdrew $9bn in superannuation in three weeks

Photo by Kevin Delvecchio on Unsplash

Australia's financial watchdog revealed that between 20 April and 10 May nearly 1.2 million successful super withdrawal applications were made.

The Australian Prudential Regulation Authority (APRA) revealed the 1,188,000 total approved superannuation withdrawals from 1,344,000 applications toppled $9 billion in value, for an average payment of $7,546.

Eligible members can withdraw up to $10,000 this financial year, and another $10,000 next financial year (from 1 July) to combat financial hardship brought on by COVID-19.

Data was collected over the three week period from 177 super funds on a 'best endeavours' basis, and the top ten funds with the largest number of applications was just under $6 billion in value.

Payments to eligible members took an average of 3.3 business days after receipt of the application from the Australian Tax Office (ATO), and 94.4% have been made within five business days.

Last week AMP revealed the average applicant to the super withdrawal scheme was 40 years old and employed in hospitality, arts, recreation, manufacturing or wholesale trade industries.

Buying a home or looking to refinance? The table below features home loans with some of the lowest variable interest rates on the market for owner occupiers.

Base criteria of: a $400,000 loan amount, variable, principal and interest (P&I) owner-occupied home loans with an LVR (loan-to-value) ratio of at least 80%. If products listed have an LVR <80%, they will be clearly identified in the product name along with the specific LVR. Monthly repayments were calculated based on the selected products’ advertised rates, applied to a $400,000 loan with a 30-year loan term.

Mortgages deferred en masse

APRA's data coincides with the Australian Banking Association (ABA) reporting that its 22 member banks have deferred payments of nearly half a million mortgages.

One in fourteen of the banks' mortgage books have deferred, totalling 429,000 home loans for a total value of $153.5 billion.

In total, more than 700,000 loans have been deferred (mortgages or otherwise), totalling $211 billion. 

ABA chief Anna Bligh said mortgage deferrals provide households with much-needed breathing space.

“Banks are here to support customers throughout the crisis and help the economy on the other side as we recover from the devastating effects of this pandemic,” she said.

“Australian families who are financially affected by this crisis have had the breathing space they need with a six month deferral on their home loan repayment while they chart a path through to the other side of this downturn."

Mortgage deferrals can leave households owing thousands more on their mortgages over the life of the loan, as interest is capitalised, meaning it still accrues during the six-month 'holiday'.

Household impacts of COVID-19

Data collected by the Australian Bureau of Statistics (ABS) from 29 April to 4 May reveals loneliness is the most reported personal stressor during COVID-19.

ABS program manager for household surveys Michelle Marquardt said loneliness affected more women (28%) than men (16%).

“Around one in five people (19%) also reported that they were experiencing difficulties maintaining a healthy lifestyle, which was more of a problem for those aged 18 to 64 years (22%) than those aged 65 years and over (9%),” she said.

Just 10% are seeking support during the pandemic.

Nearly half (46%) are also working from home, with more than half of women working from home.

The data also revealed 94% are continuing social distancing measures, while 85% are avoiding public spaces.

Note that the period was before many states started easing restrictions around shopping centres, pubs, and cafes. 

Last week it was also revealed more than three quarters of Australians are feeling financially stressed due to COVID-19.

If you would like to talk to someone about your mental health, you can contact Beyond Blue on 1300 22 4636 or Lifeline on 13 11 14.


Disclaimers

The entire market was not considered in selecting the above products. Rather, a cut-down portion of the market has been considered which includes retail products from at least the big four banks, the top 10 customer-owned institutions and Australia’s larger non-banks:

  • The big four banks are: ANZ, CBA, NAB and Westpac
  • The top 10 customer-owned Institutions are the ten largest mutual banks, credit unions and building societies in Australia, ranked by assets under management in November 2020. They are (in descending order): Great Southern Bank, Newcastle Permanent, Heritage Bank, Peoples’ Choice Credit Union, Teachers Mutual Bank, Greater Bank, IMB Bank, Beyond Bank, Bank Australia and P&N Bank.
  • The larger non-bank lenders are those who (in 2020) has more than $9 billion in Australian funded loans and advances. These groups are: Resimac, Pepper, Liberty and Firstmac.
  • If you click on a product link and you are referred to a Product or Service Provider’s web page, it is highly likely that a commercial relationship exists between that Product or Service Provider and Savings.com.au

Some providers' products may not be available in all states. To be considered, the product and rate must be clearly published on the product provider's web site.

In the interests of full disclosure, Savings.com.au, Performance Drive and Loans.com.au are part of the Firstmac Group. To read about how Savings.com.au manages potential conflicts of interest, along with how we get paid, please click through onto the web site links.

*Comparison rate is based on a loan of $150,000 over a term of 25 years. Please note the comparison rate only applies to the examples given. Different loan amounts and terms will result in different comparison rates. Costs such as redraw fees and costs savings, such as fee waivers, are not included in the comparison rate but may influence the cost of the loan.

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Harrison is a Senior Finance Journalist, and joined Savings in 2020. Prior to joining Savings, he worked for some of Australia's largest comparison sites and media organisations. With a keen interest in the economy, housing policy, and personal finance, Harrison is passionate about informing readers on the strings being pulled in high-up places and how it affects everyday Australians.

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